Regulatory Update

CFTC's 2022 Enforcement Results Highlight Recordkeeping and Supervision

by Marianna Shafir Esq.

Subscribe to the Smarsh Blog Digest

Subscribe to receive a monthly digest of articles exploring regulatory updates, news, trends and best practices in electronic communications capture and archiving.

Smarsh handles information you submit to Smarsh in accordance with its Privacy Policy. By clicking "submit", you consent to Smarsh processing your information and storing it in accordance with the Privacy Policy and agree to receive communications from Smarsh and its third-party partners regarding products and services that may be of interest to you. You may withdraw your consent at any time by emailing privacy@smarsh.com.

The Commodity Futures Trading Commission (CFTC) recently released its annual enforcement results. From its 82 enforcement actions filed in fiscal year 2022, $2.5B in restitution, disgorgement and civil monetary penalties were imposed.

"In the face of unprecedented financial market conditions directly impacting American consumers, emerging technological disruption, and growing retail investor participation, the CFTC continues its unwavering commitment to a robust enforcement program ensuring the markets we oversee are open, transparent, fair and competitive," said Chairman Rostin Behnam.

The CFTC imposed a total of $796 million in civil monetary penalties on the swap dealer and futures commission merchant (FCM) affiliates of 12 financial institutions for recordkeeping and supervision violations. It was found that the swap dealer and/or FCM failed to stop employees, including those at senior levels, from communicating both internally and externally using unapproved communication methods for several years. These methods included messages sent via personal text, WhatsApp or Signal.

The size of the penalties indicates that recordkeeping enforcement is a priority for the agency. In fact, CFTC Commissioner Christy Goldsmith Romero stated:

"The CFTC is sending a zero-tolerance message that [it] will not allow Wall Street to undermine [its] law enforcement by obfuscating or deleting communications surrounding trading."

Also, the commission stated that it brought 18 actions involving conduct related to digital assets, which represented more than 20% of all actions filed.

The 82 CFTC enforcement actions included:

  • Manipulative and deceptive conduct and spoofing
  • Violations by registered entities
  • Misappropriation of material non-public information
  • Swaps reporting and swap dealer business conduct

Fraud, registration, reporting, wash trading and position limit violations also saw enforcement actions.

The CFTC also continued to utilize its specialized Division of Enforcement (DOE) task force in complex and developing program areas to ensure consistency, identify best practices and develop new approaches and ideas based on lessons learned.

The DOE focuses on seven substantive areas:

  • Spoofing and manipulative trading
  • Digital assets
  • Insider trading and protection of confidential information
  • Bank secrecy
  • Swaps
  • Corruption
  • Romance scams

Share this post!

Marianna Shafir Esq.
Smarsh Blog

Our internal subject matter experts and our network of external industry experts are featured with insights into the technology and industry trends that affect your electronic communications compliance initiatives. Sign up to benefit from their deep understanding, tips and best practices regarding how your company can manage compliance risk while unlocking the business value of your communications data.

Ready to enable compliant productivity?

Join the 6,500+ customers using Smarsh to drive their business forward.

Contact Us

Tell us about yourself, and we’ll be in touch right away.